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Building RELATIONSHIPS

Integrating existing CRM and BI platforms to the non-gaming and social media aspects of the resort business will grow in importance going forward

The
lobby at Harrah’s Resort Atlantic City

If you think
about the “typical” guest in a modern casino property, there really isn’t any
such thing. Some are there for dining, some for entertainment, some for
shopping and some for the gaming. A typical casino patron’s preferences are
changing. This poses a unique challenge for casino marketing management.

In an effort to improve the
overall customer experience, customer tracking and loyalty systems in a diverse
environment like a casino have to aggregate employee activity that touches a
customer throughout the casino property. It has to offer the appropriate level
and type of service to each type of customer. One major hurdle is that most
gaming systems don’t interface with any non-gaming systems used in the hotel.

Harrah’s casino in Las Vegas famously
pioneered Business Intelligence (BI) and Customer Relationship Management (CRM)
systems for the gaming industry, but it took nearly a decade and an investment
of more than $100 million. The goal, especially for local and regional casinos,
is to use analytics and CRM to drive profitability more efficiently and at a
far lower cost.

Marketing strategies aimed at
retaining current customers and drawing new ones rely on the casino’s knowledge
of both gaming and non-gaming customer spending patterns and preferences. It’s
not enough to understand only the gambling patterns of a customer. That
customer’s spending on non-gaming amenities are an increasingly important
revenue stream for a casino property. For many casinos, non-gaming revenues
represent significant opportunity to grow the bottom line. Las Vegas, for
example, now derives 35 percent of its revenues from gaming and 65 percent from
non-gaming sources. Outstanding gaming floor experience alone may not get the
customer to return. Non-gaming amenities, from spas and fine dining to shows
and retail, are a growing profit center and target customers who don’t gamble
and may be a significant driver even for those who do.

Even though there is more than one customer type that visits a casino,
most still allocate a disproportionate amount of marketing budget to the top 10
to 20 percent of the gaming customers. While casinos do have to carefully
manage this revenue base, it is also imperative that the casino knows how to
reward the non-gaming customers and understands their preferences and their
contribution to the value equation.

The demographics of a
customer also play a key role in understanding the spending potential. Rewards
that reflect what a customer wants have a much greater perceived value in the
mind of the customer. Moreover, the casino has to have the ability to weigh the
cost of attracting and retaining each customer type versus the revenue it is
able to generate.

Moreover, the average players will need to be afforded the same level of
attention as the high rollers to move them up to the higher tier of players
club. When the average player feels like a high roller they will return more
often and spend more. This high-touch service is also costly. For it to make economic
sense it has to be delivered to an average player at a much lower cost.

This is the massive challenge
facing modern casino management-reducing the cost of managing top-tier gaming
customers, while broadening the customer base to reduce risk of revenue erosion
when top-tier customers leave. This combination requires flexible CRM
technology backed up by cutting-edge business processes.

Integration
with the property management system and rendering information on the
concierge’s mobile device may enable the hotel staff to greet a frequent
customer by name at the hotel entrance. This may be an exchange that lasts only
a few seconds, but it goes a long way to create a more personal experience.

COMPETING FOR ADVANTAGE

A casino or any multifaceted
environment will be slower to meet customer needs or meet them at a much higher
cost if their CRM platform is not easily adaptable. When the development of new
automated processes is time consuming and complex, it results in costly and
manual high-touch marketing tasks.

Marketing strategy, among
other things, can’t rely on a set of static or rigid processes, which limit
innovation and ability to adjust to change quickly and cost effectively. It
also restricts leveraging customer information which is dynamic in origin and
content.

A CRM system must provide
both robust out-of-the-box processes customized for a casino/hotel and the
flexibility to change as customer preferences evolve. Only then will it become
an important source of competitive advantage to attract new customers and create
brand loyalty.

The central advantage of
Microsoft’s Dynamics CRM is that while it includes out-of-the-box capabilities
it also offers the flexibility to adopt new customer outreach tactics quickly.
To support the execution of a customer centric business strategy, it enables
cost-effective implementation of constantly changing marketing strategies.

Most CRM systems come with highly standardized business processes that
work well for business functions that are mostly static such as payroll processing.
Their cost benefits are quickly diluted, especially in a dynamic environment
such as a casino by the lack of flexibility and cost of change. In the long
run, these processes become a liability. They often prevent casino marketing
departments from adopting more effective customer outreach strategies.

In the current competitive
landscape, a casino can’t afford to spend tens of millions of dollars as
Harrah’s did over a ten-year period to build and reengineer loyalty and BI
systems. Adapting technology to the business has to occur fast, cost
effectively, and continuously for the marketing plans to remain a relevant
source of competitive edge for the casino.

If a loyalty or player tracking tool alone could drive profits, every
business would be equally competitive. So what are the other sources of
competitive advantage? What does the casino know about its customer? This is
both “identified” and “unidentified” knowledge of the customer. The
“unidentified knowledge” is what a business already knows about its customer
without being fully aware of the power of that knowledge because it is often
labeled as “common or obvious knowledge.” While that knowledge of a customer is
nothing new to the insider it is nevertheless important information about the
customer that is likely not being systematically exploited to build a customer
relationship. This is typically knowledge resting with a casino employee,
instead of a database. For example, your pit boss knows Jack has two kids and
he coaches a little league baseball team. The “identified knowledge” of the
customer is information about the customer such as an anniversary date stored
in the database. Marketing can exploit this knowledge if it’s systematically
used in building the customer’s profile.

Information about the customer is dynamic and an effective marketing
strategy has to be able to link and draw from multiple sources of customer
information to get to know the customer better than the competition. Non-gaming
amenities on the property are now as important a source of revenue as the
gaming floor revenue in many casinos. Thus capturing data from the table games
pit and from the spa is required to understand the customer taste and
determining promotions that customer wants and the property can afford.
Therefore the CRM platform should aggregate data on the customer residing in
multiple silos such as the casino management system, food and beverage system,
reward system, and the hotel’s reservation system.

Getting all data on one customer in one place is the first step to
developing a 360-degree view of the customer. How is data on customer spend at
the spa related to customer spend in the casino? How can this relationship be
used in developing the customer’s profile? How is this knowledge meaningful in
developing customer loyalty? These are some of the basic questions that a
casino will be able to answer by aggregating data sitting in multiple “silo-ed”
systems. Therefore it’s important to connect multiple systems that house information
on a customer. For example, integration with the property management system and
rendering information on the concierge’s mobile device may enable the hotel
staff to greet a frequent customer by name at the hotel entrance. This may be
an exchange that lasts only a few seconds, but it goes a long way to create a
more personal experience. A higher level of personal treatment can be delivered
cost effectively by integrating and rendering data from multiple systems.

Marketing strategies are as powerful as the speed at which data from
multiple systems is analyzed and used to offer customers a higher level of
service. It’s one of the ways to deliver high-touch customer service cost
effectively. For example, real-time data integration with the player tracking
system may allow a customer who gets hungry while playing blackjack to
instantly use reward points to purchase
a meal. In some situations a pit boss
may want to know when a high-roller player card is swiped on the floor.
Similarly, knowing that a customer likes to play golf when making room
reservation and offering a pro shop coupon in the room confirmation email.
These processes that depend on how quickly relevant information on a customer
can be pulled to offer a promotion that customer cares about can-without human
intervention-make the interaction with the customer personal and goes to
increasing brand loyalty.

Microsoft’s Dynamics CRM is designed to work seamlessly with other
systems. It natively integrates with any application that can expose and
consume web services. Microsoft’s BizTalk may be deployed when there are
multiple integration points with applications that cannot expose or consume web
services. Microsoft’s BizTalk has a comprehensive list of adaptors that make
integration both less expensive and less time consuming. This addresses a major
hurdle casinos face in implementing an effective CRM technology by aggregating
data from multiple gaming and non-gaming platforms. Data integration services,
to analyze customer data from diverse data sources, are built into the BI
platform.

Dynamics CRM also provides extended capabilities such as the ability to
analyze the revenue potential of gaming and non-gaming customers and the
associated marketing cost. Share Point integration with Microsoft SQL Server
allows users to store, share, and search for information as well as customize
dashboards with visual data decomposition or drill-down capabilities.

Microsoft’s BI strategy relies on a basic premise that powerful analytical
capabilities must be combined with equally powerful yet ubiquitous and familiar
collaboration tools such as Share Point and Excel to share data intelligence
externally and internally. Additionally, it is important that these tools be
easy to learn and intuitive. Data visualization tools such as Office has given
users self-serve capability in data analytics. Ability to analyze millions of
rows of data inside Excel without DBA involvement is game changing. This means
more extensive and widespread use of data analytics as a tool for decision
making across the enterprise.

Marketing
strategies are as powerful as the speed at which data from multiple systems is
analyzed and used to offer customer a higher level of service... For example,
real-time data integration with the player tracking system may allow a customer
who gets hungry while playing blackjack to instantly use reward points to
purchase a meal.

SOCIAL MARKETING

Some 10 years ago, I ordered lemonade without ice at an upscale
restaurant because it was a particularly cold day and icy lemonade was just not
as appealing. The restaurant charged two dollar extra because more lemons had
to be squeezed in a glass without ice. Today an incident of this type would be
posted on Facebook to hundreds of friends, likely from the table itself with a
picture of the leftover iceless lemonade, and my thoughts on the whole matter.

Internal customer data housed in casino management systems, databases or
personal knowledge of casino employees is as valuable as external data in
social media sites. What’s the value of a posting on Facebook stating that
someone is having a super-nice time at a certain casino? Generations X and Y
post on Facebook or blog frequently. About 82 percent of the Facebook users in
the 18-to-24 age group check Facebook more than once a day.

As they get older, they’re likely to stick with the habit as it is how
they have learned to be social. Over 70 percent in the 24-to-34 and 35-to-44
age groups check Facebook more than once a day. The fastest-growing segment of
Facebook users, according to the Neilson company, is also the most important
demographic for the casino. They belong to the 35-to-49 year-old group.

Social media sites have the potential to compound many times over both
the bad and good experiences. Unlike 10 years ago a customer today is able to
quickly spread the word about an “experience.” Every experience potentially
matters and has a potential impact on the bottom line.

Casinos have largely lost control of content creation to its customers.
Content is distributed in many social networks such as Twitter, Facebook, and
YouTube. It does not follow any set standard. Casinos realize the power of
social networks and social media marketing. Understanding how to harness the
power to its advantage is complex.

A marketing function like scanning Twitter accounts for city name and
words such as “upcoming trips” can correlate to other external data sources
such as an upcoming conference in the neighboring town. This can pinpoint a
potential source of new customers for the casino within a 10 to 20 mile radius.
Mapping this data in Bing maps will show visually where the people attending a
conference are likely to stay. This information can help determine how busy the
casino is expected to be during those days of the week that helps assess the
opportunity cost of any promotional offer it may want to plan.

Technologies like SharePoint, by itself, will not address the complexity
inherent in developing digital marketing plans but it will enable a casino to
be nimble and cost effective in implementing its social media strategy.
SharePoint has social media connectors as well as pre-defined components to
easily launch social sites, wikis and blogs.

Dynamics CRM and SharePoint are highly complementary and together can
deliver an unparalleled level of insight about customer preferences and
characteristics to the casino. The inter-operation between Dynamics CRM and
SharePoint and between SQL server and SharePoint exposes internal and external
customer data to the CRM system and BI tools for understanding and building
marketing campaigns that customers value.

Social media can be used in other innovative ways to engage with
customers. The technology can enable continual customer engagement, which is
often the end goal of social marketing, by providing social sites and other
forums such as blogs to share experiences and interests. One avenue is to link
individuals with like interests via social network at the casino/hotel property
itself. Social data can have powerful uses in being able to connect people with
similar gaming preferences or interests. As an example, a casino can offer a
group of friends interested in golf free club rentals or perhaps access to the
newest model of Titleist golf ball.

By using social data, the casino can target promotion dollars to creating
a group social experience such as a golf outing that is to the group
significantly more fun than a set of separate promotions even if the dollar
value of individual promotions is greater. Using social data can help exploit
the notion that perceived value of a promotion does not always directly
correlate to its monetary value. Analyzing social data on how customers
interact with one another on social networks will enable the casino/hotel to
target promotions to network or a group of friends at the same time. Tracking
this group social experience is important to understanding the ROI and for
designing similar social experiences to attract the group back to the casino.

By using
social data, the casino can target promotion dollars to create a group social
experience such as a golf outing that is to the group significantly more fun
than a set of separate promotions even if the dollar value of individual
promotions is greater.

DEALING BIG DATA

An effective BI strategy must be able to assimilate data from external
sources, including the Internet, and correlate it with data in internal systems
to draw intelligent conclusions about a customer’s spending pattern, tastes,
and level of satisfaction. Social media marketing strategies that use social
data rely heavily in being able to cost effectively analyze large volumes of
unstructured data.

Similarly, predictive analysis can provide valuable insight of
customer’s behavior by observing customer preferences over a long period of
time and by finding relevant data from external sources. A major challenge in
making sense out of external data is that it resides in no one format and is
largely unstructured. Valuable data may reside in YouTube, in pictures, in RSS
feeds or in legacy systems. Moreover the volume of data can be in petabytes
(one quadrillion bytes) and it is very costly to create and maintain an
on-premise infrastructure for big data analysis.

Hadoop is an open sourced platform for analyzing big data workloads in a
distributed environment. Microsoft makes Hadoop available on both Windows
Servers and as a service on Azure. Big data as a service on Azure is a highly
cost-effective way to implement a Hadoop platform. In conjunction, other Azure
platform tools such as Bing maps for geospatial analysis, SQL server, and
SharePoint can help casinos visualize extremely large data sets from diverse
sources. These powerful data aggregation and analysis tools give casinos
contextual data to develop deeper understanding of customer’s preferences and
habits.

The
ultimate goal is real-time analysis of large volumes of structured and
unstructured data to offer promotions while the customer is on the property or
engaged in a specific activity. For example, correlating information on
visiting customers who are inclined to see shows and the number of unsold
tickets to a local show to offer last minute deeply discounted promotions can
help fill the seats for an event whose fixed cost has already been incurred.
Smart phone usage, explosion of social media, and cloud computing are sources
of potential contextual information on customers that Dynamics CRM can use
strategically to grow revenues.

The
ultimate goal is real-time analysis of large volumes of structured and
unstructured data to offer promotions while the customer is on the property or
engaged in a specific activity. For example, correlating information on
visiting customers who are inclined to see shows and the number of unsold
tickets to a local show to offer last-minute deeply discounted promotions can
help fill the seats for an event whose fixed cost has already been incurred.

THE FUTURE OF GAMING

Many states are contemplating legislation to build casinos or regulate
online gambling as a source of tax revenue. There is also a cultural shift
partly because of the prevalence and popularity of non-gaming amenities on the
casino properties. Gaming has become more accepted in the society as one of the
mainstream sources of entertainment. It is certain that over the next few
years, the gaming platforms will extend to the Internet, mobile devices, and
TV. Traditional gaming floors in the brick-and-mortar casinos with standalone
slot machines and poker tables are also modernizing to server-based networked
gaming floors. Also with in-room gaming the traditional gaming floor boundaries
are being extended.

The Dynamics CRM platform can seamlessly interface with increasingly
diverse gaming platforms and channels to access them. The platform’s open
architecture gives developers the choice to build web applications on other
programming languages. It also includes support for open source languages such
as PHP.

Security and privacy are important considerations in the future
multi-channel and multi-platform gaming architectures. Security and privacy
controls are built into each component from the infrastructure layer to the
application layer. Moreover, security is maintained, enhanced, and regularly
tested.

The Windows Azure platform provides on-demand computing and storage
services to host, scale, build, and manage next-generation gaming applications.
On-demand provisioning of storage and computing capacity will influenceweb-based
gaming application designs because of the high degree of variability between
peak and non-peak usage of online gaming platforms. The Windows Azure platform
delivers both high availability and dynamic scaling where customers pay for
consumption.

In closing, the integration of customer interactions with the property at
different points during the customer’s stay and the integration of the
casino/hotel’s CRM platform with new-age gaming platforms will lead to a rich
and impactful ongoing relationship between the casino and its customers.
Actionable analytics that draw insight from social and contextual data help
create memorable customer experiences and emotional attachment to the
brand.

Niten
Malik is a director at Microsoft who focuses on creating SaaS solutions. Over
the years, he has built expertise in developing business case and operating
models for cloud-based multi-tenant solutions. Most recently, he led
development cloud computing strategy and capabilities for Accenture’s Public
Service operating group. He can be contacted at nimalik@Microsoft.com.

Events

The spread of COVID-19 has compelled all casinos to rewrite their 2020 playbook. In this high-level panel you will hear how casino marketers can kick-start and rebuild customer relationships now that the post-closure phase is underway. Specific issues to be covered will include what your near-term customer re-engagement plan should look like, how relationship management and loyalty programs that were impacted by the shutdown can be retooled, and some rules of the road for casino marketers as we point toward the second half of the year.

How long do you think it will take the gaming industry to economically recover from the COVID-19 pandemic and government-mandated closings?

In this issue of Casino Journal, The gaming industry responds to the social and economic onslaught of COVID-19, Developing a Coronavirus Protection Strategy for Casinos and Cardroom, A New Way to Build Casino Loyalty during Coronavirus, and much more!

In this issue of Sports Betting Management, read how more and more Native American properties establish sportsbooks or strike marketing deals with professional teams and leagues, The National Football League (NFL) continues to have an impact on sports betting within the U.S., and much more!